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Saturday, May 31, 2008

As you may be aware of that as per existing Schedule I ( giving the permissible credits to the Non-Resident (External) Rupee (NRE) account) to the Foreign Exchange Management (Deposit) Regulations, 2000 [Notification No. FEMA 5/2000-RB dated May 3, 2000], as amended from time to time, . Further, in terms of Anti-Money Laundering guidelines [cf A. P. (DIR Series) Circular No. 14 dated October 17, 2007], FFMCs are permitted to encash foreign currency and make cash payment only up to USD 3000 or its equivalent. Amount exceeding USD 3000 or its equivalent has to be paid by way of demand draft or bankers' cheque.

RBI vide its A. P. (DIR Series) Circular No. 45 dated 30th May 2008 as a measure of liberalization and also to meet the genuine needs of the NRE account holders, it has been decided that AD Category – I banks and authorized banks may credit proceeds of demand drafts / bankers' cheques issued against encashment of foreign currency to the NRE account of the NRI account holder where the instruments issued to the NRE account holder are supported by encashment certificate issued by AD Category – I / Category – II. So, now there is no question of limit for encashment.